On April 5, the NHTSA levied their largest civil penalty in recorded history. $16,375,000 against Toyota, because “they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families.” When we reported that, people thought Toyota would just appeal and drag it out. Not so easy, said The Nikkei [sub]. Toyota is between a rock and a hard place: “Admitting to the charge could strengthen the cases of car owners suing the firm, while refuting it risks inflaming U.S. public opinion.” Toyota found a way out.

According to Japan’s Jiji News Agency, Toyota will pay the $16.4m on Monday morning without admitting any wrongdoing. According to Jiji, Toyota “concluded that filing a complaint over the penalty would draw opposition from the U.S. government and Congress and further damage its brand image, already hurt by recent massive recalls to deal with the defect.”

Reuters says that Toyota might still appeal if regulators don’t approve the company’s plan of not admitting the allegations.

They just need to take their medicine … trying to get out on the cheap isn’t going to change the fact that there will be a mountain of lawsuits (now consolidated for some issues) that they are going to have to “John-Henry” their way through…

It would be a stronger lesson to the industry if DOT said, yes, we’ll let you avoid admitting responsiblity, but this is the end of that policy, as well as the end of “voluntary” recalls that were initiated by an ODI investigation (rather than an OEM quickly informing DOT of an issue and their desire to immediate recall.)

If you have a recallable defect, there is no one else responsible but you. If you have a recall that you didn’t discover or initiate, but one that was discovered by the insurance industry, or the the government, or initiatee by the government, then it is not voluntary (and maybe a fine should be levied as well.)

I don’t think that this will help much either way. The fine is that they didn’t notify the NHTSA soon enough about the problem, not that the problem didn’t exist. I don’t think this is that big of a deal.

$16,400,000 is pocket change to Toyota, and if they can get out of this by paying that without admission of guilt they should certainly take it, but the NHTSA would be a fool to let them.

Toyota’s damages could possibly be dragged into the billions, or even tens of billions, and seriously hurt the company if the government plays this right. If LaHood et al take this deal then it is just a de facto admission that they were out to besmirch the Toyota name a bit without ever following through.

I myself, as well as practically every employee of a domestic manufacturer
or a domestic manufacturer’s dealer wants to see Toyota bleed out over this. While a lot of people said that the government inolvement in GM and Chrysler could end up hurting Ford, this is one of the situations in which Ford benefits without getting dirty even if the government’s reasoning for pushing Toyota against the wall is to prop up GM/Chrysler.